The S&P 500 and the Dow boasted record closing highs on Thursday after a Federal Reserve policy update that was less hawkish than expected while the tech-heavy Nasdaq underperformed as Oracle's financial update made investors wary of AI bets.
The Dow Jones Industrial Average rose 646.26 points, or 1.34 per cent, to 48,704.01, vaulting above its November 12 closing record. The S&P 500 gained 14.32 points, or 0.21 per cent, to 6,901.00, breaching its October 28 record close. The Nasdaq Composite lost 60.30 points, or 0.25 per cent, to 23,593.86.
Oracle shares tumbled 10.8 per cent in their biggest one-day drop since late January and they were the top S&P 500 decliner after the company's quarterly forecasts fell short of analysts' estimates. It had also warned that annual spending would run $US15 billion higher than previously planned, stoking fears about its big push into artificial intelligence.
Ivestors feared that the company's heavy reliance on debt financing could be part of an AI bubble similar to the dotcom bust of the early 2000s.
While Oracle helped drag other technology names lower, the Dow rallied along with the Russell 2000 small-cap index, which closed up 1.2 per cent and the S&P 500 value index, up 0.6 per cent, outperformed the growth index, which ended off 0.12 per cent.
Digesting the fed update
Investors also continued to digest the US central bank's update from Wednesday, when the Fed lowered borrowing costs by 25 basis points and Chair Jerome Powell signalled a pause on further easing.
However, investors were relieved that the Fed still had some rate cuts on its dot plot as it balanced still-elevated inflation with signs of labour market weakness.
Thursday's data from the Labor Department showed jobless claims rose to 236,000 for the week ending December 6, compared with estimates of 220,000.
